African fastest growing economies face frequent disruptions: Barloworld

AFRICA is posting the biggest GDP growth gains in the world and supply chains are in danger of being overwhelmed, says Barloworld Logistics CEO Steve Ford.

While western economies' GDP gains lag, Angola, had the world's fastest growing economy last year, according to the IMF, and Mozambique was the fastest growing non-oil producing country. Despite the political trouble in Zimbabwe, its Beitbridge border crossing is the busiest in Africa by cargo volume.

Six of the world's 10 fastest growing economies are in sub-Saharan Africa, Mr Ford noted.

In Africa, Supply Chain Management (SCM) - notwithstanding creaking infrastructure and interminable red tape - the continent is seeing the deployment of the latest technology, thereby achieving a holistic approach to cost management and the freeing up of value, he said.

Said Mr Ford: "In revenue terms, an immediate impact can be seen on sales, through the increase in service levels, reduction of out of stocks and the creation of more loyal customers. Operating costs, similarly, reduce through the reduction of the cost of holding inventory, and the reduction of write-offs due to obsolete stock Operational cost savings are also realised in direct distribution costs as these are optimised, as well as the minimising of production downtime."

With regards to risk aversion, he notes that BCI Supply Chain Resilience's survey of 559 respondents from 62 countries last year found that at least 85 per cent had experienced at least one disruptive incident in 2011, and only eight per cent reported all of their key suppliers had business continuity programmes in place.

"In an industry with fast inventory turns such as retail, companies without risk plans can be faced with empty shelves from harsh weather conditions, strikes and increasingly - currency volatility," he said.

"Optimising inventory planning now requires an unprecedented degree of flexibility, while retaining the visibility provided by maturing software solutions. Business intelligence solutions need to provide the ability to have a seamless view of what is happening across the entire supply chain network - a centralised system of command and control. Although technology is evolving to make a single view of the supply chain possible, the challenge of disparate parts and silo'ed systems remains."